It's getting kinda ridiculous. I just realized we're down 20% over the past year vs. the Euro. I know its great for the stock market, but something tells me there's a limit, right?
Of course there is a limit, however no one knows that limit until the trade is broken. Right now it seems 99% are long gold and 99% are short the dollar, the trade is so played out that eventually its going to break. However I dont think this trade breaks just yet, I think the dollar takes out its 2008 low. Bernanke could care less to raise rates since he notices the weak dollar taking care of all necessary problems. The dollar carry trade is creating even more opportunity in the market, but that of course too will come to an end. Rates of course have to rise sooner or later as stimulus creates growth, but who knows when this is happening, some predict a rise in rates sometime in 2011 or even as late as 2012, by that time inflation will be way out of control.
It can go to zero. Look at our coins...the metal in the coins is starting to get worth more than the face value of the coin. That says something! A pre-1982 penny is worth 211% of its face value. A 1946-2009 nickel is worth about 93% of its face value and even a penny made today which is 97.5% zinc is worth 67% of its face value today. The dollar is like the titanic. Its got a hole in the side of the ship and its slowly sinking. Most of the people on the ship dont believe the ship can sink so they are not heading to the lifeboats. Once everyone sees that the ship is really going to sink, there will be no more lifeboats left for them.
If you think those numbers are nice, have a look at http://www.coinflation.com/ the figures for some of the silver coins further down the page.
I only hope gold will correct to 1050 and then sky high. That will give me time to buy more of it. Not buying more right now, but am sitting pretty on what I already hold.
I am a gold bull but the trade is EXTREMELY overcrowded. Predictions as high as $5000, going to be interesting to see where gold trades in 1 2 3 and even 10 years.
So my question is, if you can't afford a stock pile of gold or silver - or you simply want to diversify - does it make sense to try to get into a position where you can earn money in foreign currency? I guess that's what other countries do when they come here for business, right?
Now is hardly the time to start something new in trading. And your premise if false. Everyone can stockpile gold or silver. They just don't want to admit things could get so bad that it would be a good idea. Gold is a horrible trading tool, but an unsurpassed preserver of existing wealth, whether you buy 100 oz bars or 1-ounce silver eagles for $25 a pop.
Dig a huge hole in your yard and cash out in rolls of nickels. http://www.coinflation.com/coins/1946-2007-Jefferson-Nickel-Value.html
Maybe I don't follow... The main point of my question is that if our dollar is devalued due to inflation or hyperinflation - would earning a wage from another country (via the internet, etc) be a good way to gain wealth in comparison to those who are still earning dollars? I've heard that all of the Hungarian currency combined didn't equal 1000th of a US dollar when they finally settled their bout of hyperinflation. My thought is, if a Hungarian man could have earned one US dime per day, he'd be well off. Does that make sense? Why or why not? Thanks.